At the end of its first year of trading, a company has total trade receivables (debtors) of £20,000.The company accountant decides that there is an element of doubt about the ability of some ofthe trade receivables (debtors) to make payment. The accountant therefore sets up a provision fordoubtful debts in the amount of £3,000. During the company's second year of trading, tradereceivables (debtors) previously regarded as doubtful, in the amount of £500, succeed in makingpayment to the company. At the end of its second year of trading, the company has total tradereceivables (debtors) of £40,000, including the remaining trade receivables (debtors) identifiedas doubtful at the end of the first year. On reviewing trade receivables (debtors) at the end of thesecond year, the company accountant concludes that a total of £4,000 of receivables (debtors)should be classified as doubtful.What is the resultant figure for trade receivables (debtors), after deducting the provision fordoubtful debts, that will appear in the statement of financial position (balance sheet) of thecompany at the end of Year 1?A) 16,500B) 23,000C) 17,000D) 20,000What is the resultant figure for trade receivables (debtors), after deducting the provision fordoubtful debts, that will appear in the statement of financial position (balance sheet) of thecompany at the end of Year 2?A) 47,000B) 44,500C) 36,000D) 40,000

A provision for doubtful debts is an accounting entry made by a company to account for the…

What is the resultant figure for trade receivables (debtors), after deducting the provision for doubtful debts, that will appear in the statement of financial position (balance sheet) of the company at the end of Year 1? A) 16,500 B) 23,000 C) 17,000 D) 20,000 What is the resultant figure for trade receivables (debtors), after deducting the provision for doubtful debts, that will appear in the statement of financial position (balance sheet) of the company at the end of Year 2? A) 47,000 B) 44,500 C) 36,000 D) 40,000

What is the resultant figure for trade receivables (debtors), after deducting the provision for doubtful debts, that will appear in the statement of financial position (balance sheet) of the company at the end of Year 1? A) 16,500 B) 23,000 C) 17,000 D) 20,000 What is the resultant figure for trade receivables (debtors), after deducting the provision for doubtful debts, that will appear in the statement of financial position (balance sheet) of the company at the end of Year 2? A) 47,000 B) 44,500 C) 36,000 D) 40,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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